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Tuesday, 22 January 2013

Could this be the final decision in the Battle of the Buds? Today the General Court gave its ruling in regard to four cases which have been dragging on since time immemorial and which, when wrapped into one, were dished up to the Court of Justice of the European Union (CJEU) two years ago. There, as Case C 96/09 PAnheuser-Busch, Inc. v Budějovický Budvar, described by the IPKat here, they were unceremoniously tossed back to the General Court for its further attention.

How did this all happen? Back on 1 April 1996, when the Office for Harmonisation in the Internal Market still smelled of new paint and no-one yet realised how few business flights landed at Alicante, Anheuser-Busch applied to register four Community trade marks (CTMs). The first was a figurative mark featuring the word Bud for goods in Classes 16, 21, 25 and 32. The other three applications were in respect of the word mark Bud, in Classes 32 (beers), 33 (alcoholic beverages), 35 (setting up databases, gathering data and information in databases), 38 (telecommunications, ie making available and supplying data and information, supplying and communicating information stored in databases), 41 (education, entertainment) and 42 (restaurant, bar and pub services; operating a database).

Budvar opposed, citing the following alleged prior rights: (i) a figurative Bud mark effective for ‘all types of light and dark beer’, in Austria, Benelux and Italy; (ii) the appellation of origin ‘Bud’, registered under the Lisbon Agreement in respect of beer, and effective in France, Italy and Portugal; (iii) an Austrian appellation of origin ‘Bud’ protected in Austria under a bilateral convention with the former state of Czechoslovakia.

The Opposition Division partially upheld Budvar’s opposition, in respect of ‘restaurant, bar and pub services’ covered by Anheuser-Busch’s fourth application, but all the other grounds of opposition were dismissed. Said the Opposition Division, Budvar had proved that it had a right to the appellation of origin ‘Bud’ in France, Italy and Portugal, though in relation to Italy and Portugal the arguments put forward by Budvar were not sufficiently specific to determine the scope of its protection under national law.

The Opposition Division also found that the ‘restaurant, bar and pub services’ covered by one of the applications were similar to the ‘beer’ covered by the appellation of origin ‘Bud’, there being a likelihood of confusion given that the signs concerned were identical. However, in respect of the other goods, and in the context of the applicable French law, Budvar had failed to demonstrate how the use of the mark applied for was likely to weaken or undermine the reputation of the appellation of origin concerned, when the goods covered were different.

Both parties appealed.

The Board of Appeal dismissed all Budvar’s appeals but allowed that of Anheuser-Busch. It considered that Budvar no longer appeared to refer to its international figurative mark as the basis of its opposition, but solely to the appellation of origin ‘Bud’. It was however difficult to see how ‘Bud’ could be considered to be an appellation (or designation) of origin, or even an indirect indication of geographical origin. The Board also held that the evidence provided by Budvar to show use of the appellation of origin ‘Bud’ in Austria, France, Italy and Portugal was insufficient. Thirdly, it held that Budvar had not demonstrated that the appellation of origin gave it the right to prohibit use of the word ‘Bud’ as a trade mark in Austria or France.

Budvar appealed to the Court of First Instance (now the General Court), contending that (i) the sign BUD could be considered to be an appellation of origin, and (ii) the conditions of Article 8(4) of Regulation 40/94, in relation to an opposition based on the existence of an earlier non-registered mark of more than purely local significance, were satisfied. The Court of First Instance allowed the appeal.

In reaching its decision the Court of First Instance found that ‘Bud’ could be considered to be an appellation of origin, that it was protected under the Lisbon Agreement, and that the validity of a national mark may not be called into question in proceedings for registration of a CTM: when the contested decisions were adopted, the effects of the appellation of origin ‘Bud’ had not been declared invalid in France by a decision against which there was no appeal. Accordingly the Board of Appeal did not have the power to call into question the fact that the claimed earlier right was an appellation of origin. At most it could have suspended the opposition proceedings until a final judgment on the matter was delivered. The Court also found that the appellation ‘Bud’ remained protected under the bilateral convention, was still effective following the break-up of the Czechoslovak Socialist Republic.

The Court then upheld Budvar’s appeal in relation to the use in the course of trade of a sign of more than mere local significance. The Board of Appeal was wrong in law to apply, by analogy, the provisions of Community law relating to the ‘genuine’ use of an earlier trade mark. In the present context, an opposing party need only show that a sign had been used in the context of a commercial activity with a view to economic advantage. Subject to this, an appellation of origin registered under the Lisbon Agreement could not be deemed to have become generic. In any event, such appellations might enjoy protection in a particular territory even though they are only used in another territory.

On the facts, the Court held, Budvar had provided proof that the signs concerned were used in the course of trade and it was unnecessary to show that the signs were used prior to the contested CTM applications. At most, Budvar only had to show that the signs were used before publication of the trade mark applications in the Community Trade Marks Bulletin. The documents Budvar relied on were sufficient proof of use of the word ‘Bud’ even though they referred to a product on which the word ‘Bud’ was always accompanied by ‘strong’ or ‘super strong’.

In the context of an opposition based on the use in the course of trade of a sign of more than mere local significance, the Court held that it was sufficient for the sign to be used in the course of trade: the fact that it was identical to a trade mark did not mean that it was not used in the course of trade. Moreover, OHIM and Anheuser-Busch did not clearly specify how the sign ‘Bud’ had been used ‘as a trade mark’. There was no evidence that the expression ‘Bud’, displayed on the goods in question, referred to the commercial origin of the products more than to its geographical origin.

The word ‘significance’ in the formula “more than mere local significance” referred to the geographical extent of a sign’s protection: the Board of Appeal therefore erred in law when, as regards France, it linked proof of use of the sign concerned to the requirement that the right concerned must have a significance which is not merely local.

The Court then reviewed the effect and significance of litigation between the same parties and concerning the same sign in various national jurisdictions, finding that those decisions were not binding upon it and that It was not conclusive that Budvar had not been able to prevent Anheuser-Busch’s distributor from selling beer in France under the Bud trade mark since, under Article 8(4), the opposing party does not need to establish that he has in fact already been able to prohibit use of a subsequent mark, but only that he has such a right available to him.

Anheuser-Busch then appealed to the CJEU. Advocate General Cruz Villalón advised the CJEU to allow the appeal and remit the case to the General Court. Why? In particular he considered that (i) the requirement of ‘use in the course of trade’ in Article 8(4) is, like the other requirements in that provision, an independent concept which warrants its own interpretation; (ii) it is relevant to argue that an opponent relying on Article 8(4) has used the invoked sign as a trade mark rather than for the purpose of indicating the geographical origin of a product; (iii) for the purposes of Article 8(4) the use of the opponent’s sign must, where appropriate, be proved before the date of filing, rather than at any time up to the date of publication, of the opposed application for registration (iv) the judgment under appeal supplied an interpretation which was excessively literal and which adhered too closely to the wording of Article 8(4). The CJEU accepted the advice of the Advocate General, set aside the judgment of the (now) General Court which, it said, made three errors of law, and remitted the case for further consideration by that Court (the judgment was 221 paragraphs long; you won't want to read it but the Curia press release summarises it very well).

[All of the above introduction was prepared by the blogmeister Jeremy. Both he and new Kat Darren are occupied today with the JIPLP/GRUR Int Seminar, which has been on the IPKat sidebar for a while. So continuing the noble tradition of community cooperative blogging, Darren's colleague, twitter enthusiast and Katfriend Simon Stanes (pictured right) kindly takes up the story....]

Today the General Court gave their revised decision, responding to the CJEU back-pass in a snappy 69 paragraphs (which you can read here) conveniently summarised in this even snappier press release (which you can read here). Suitably chastened, they went through their working on the original appeal from the Board of Appeal decision to see what remained to be decided.

The presumption of validity for Budvar’s registrations under the Lisbon agreement remained from the original General Court decision, as did the rejection of any need for the concept of “genuine use” to be applied to the “use in the course of trade” test. The previous failure of Budvar to restrain Anheuser-Busch’s French distributor was still not sufficient to strike out Budvar’s “right to prohibit use”.

Simon's cat Chairman Miaow seizes his chance to be seen

Suitably armed with an “earlier right” for Budvar, this left the General Court to apply the CJEU’s guidance on the evidence required to satisfy “use in the course of trade of more than mere local significance”. Budvar’s evidence amounted to a number of French invoices and slightly more affidavit evidence concerning sales in Austria.

Working through each of the opposition cases in turn, the General Court found no French evidence dating from prior to the application filing date in Case T-309/06 RENV. This appeal therefore fell to one of the CJEU’s key findings.

To the extent that the remaining cases relied on the French rights and pre-filing date evidence was found (after a number of later invoices had been discounted depending upon the filing dates of each remaining Anheuser-Busch application) the General Court when on to consider the more holistic approach favoured by the CJEU when assessing the impact of the evidence. The limited geographical scope (reaching just three French towns) and the very limited volume of product sold (0.87 Hectolitres or 87 Litres to the rest of us – a very good night out, but not a commercially significant one), all counted against Budvar and led the General Court to conclude that the evidence was insufficient to satisfy the use test for France. Case T-257/06 RENV dropped out of the game at this point.

This left the only slightly more extensive evidence for Austria, additionally relied upon in the final two cases. Again, low sales volume and turnover were fatal to Budvar’s case. An average of 12.82 Hectolitres per year, although a skin-full for any Kat at a single sitting, was a mere drop in the ocean compared to Austria’s national average, in excess of 9 million hectolitres (way-to-go Austria!) Budvar’s arguments that in the case of a necessarily geographically restricted appellation of origin a qualitative rather than quantitative assessment of use was appropriate, were rather undermined by annual production of over a million hectolitres (how did we ever manage with just “litres”), of which half was destined for export.

The final two of the plucky Czech brewer’s squadron of appeals thus going down in flames, It only remained for the General Court to settle the question of costs. Perhaps appropriately, in the context of the dispute as a whole, the court recognised Budvar’s partial success on a number of points appealed from the Board of Appeal and declared a score draw.

If this does prove to be the final act of this long running saga (invalidation of the newly granted CTMs, anyone?), OHIM and the European Court will be deprived of a rich seam of business and can no longer be said to be “only here for the beers”.

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